Smart investment tips for mothers

A mother handles myriad responsibilities in a household. It not only includes running the household, but also, as with many working mothers, planning and aspiring for the future needs for their children like their education, health and marriage.

While all mothers concentrate on executing these responsibilities with utmost diligence, they may not necessarily be aware of the most optimal way of reaching their own financial goals to ensure a good education and life for their children and hence the importance of financial planning.
The foremost step to financial planning for mothers is to identify and set their financial goals. Most working mothers contribute a certain amount of money every month towards their household expenses and child care, because of which their families are used to a particular standard of living. It, therefore, becomes important for working mothers to take care that they are not underinsured. Working mothers should also take care to have sufficient health insurance to protect themselves against accidents or sudden critical illnesses.
Similarly, while stay-at-home mothers may not be contributing financially towards the household expenditure, they are the glue of the whole family in every other way. It becomes essential therefore that they are not only insured but more important also covered against any critical illnesses and accidents.
The next key financial goal for any parent including mothers is saving for child’s education and marriage. While it may not be a financial burden for mothers in the initial years, the cost of education can become serious a matter of concern once the child goes to college. To reduce the burden of the exorbitant cost of education, mothers should start saving and investing for it as early as possible. There are various investment options available in the market to address this need such as child education plans in the market offered by insurance companies and some mutual funds as well as other form of savings.
Similarly for marriages, while gold has always an attractive investment option for most women, it is not a very highly recommended one, given the rising prices. Mothers can even explore investing in fixed deposits and balanced funds offered by mutual fund companies and insurance companies for medium to long term horizon. They can even look at investing in equities if they would require money in the time frame of 5-8 years.
For women who can afford the cost of equated monthly installment (EMIs), investing in real estate is also an excellent option if you would like to leave your children with a home. Working mothers can also avail tax benefits on home loan EMIs paid. In addition to these, roughly 6 months of the family monthly expenditure should be kept in liquid cash for any emergency or sudden expenditure arising in the family.
Lastly, apart from covering their life and saving for their children’s education and marriage, it is essential for all mothers to plan for their retirement. Women, especially working mothers, need to plan their retirement so that they are able to maintain their own standard of living without being dependent on children or anyone else. Apart from the provident fund for working mothers, which will give them a lump sum of money on retirement, they should also invest in retirement plans offered by life insurers and mutual funds.
Hence, the key to a good and efficient financial planning is to start investing as early as possible. Mothers, given the many members of their family they take care of, even starting early with small amounts will help them build a big corpus with the power of compounding. u
— Author is Director, Corporate Initiatives and Business Development, Aviva India

Male tax payers to save Rs 2,060/yr; elderly biggest gainers

Finance Minister Pranab Mukherjee has given a saving of Rs 2,060 per annum to male income tax payers by raising the exemption limit from Rs 1.60 lakh to Rs 1.80 lakh.

For women, Mukherjee has not given any benefit by retaining the exemption limit at Rs 1.90 lakh per annum.

However, senior citizens, especially male, will be the gainers. First the eligibility criteria has been reduced from 65 years to 60 years of age and second, there is a major benefit for those above 80 years earning Rs 5 lakh per annum and above.

For 'Very Senior Citizens' (above 80 years of age) earning Rs 5 lakh and above the tax savings would be Rs 26,780 per annum.

However, those earning up to Rs 3 lakh in the above said category, would save Rs 6,018 in a year.


 PTI

No filling of Tax Returns if salary if only income

In a big relief from cumbersome tax filing process for the salaried class, finance minister Pranab Mukherjee on Monday proposed to exempt them from filing tax returns unless they have other sources of income. 
The government will be issuing a notification exempting 'classes of persons' from the requirement of furnishing  income tax returns, said the Memorandum to the Finance Bill 2011. 
The decision, which will come into effect from June 1, 2011, will reduce the compliance burden on small taxpayers, it added. 
Salaried taxpayers who do not have other sources of income and whose incomes are subject to Tax Deduction at Source (TDS) will be excluded from filing returns. 
"Therefore, in cases where there is no other source of income, filing of a return is duplication of existing information," the Memorandum said. 
Every person whose income exceeds the taxable limit is required to file return of income.

                                                           -PTI